1.For the grits: In a large sauce pot, bring the water and milk to a boil. Whisk in grits, reduce to a simmer and cook, stirring frequently until the grits are tender. (Time can vary greatly depending on the brand of grits. Allow at least an hour). When grits are done, stir in butter, chiles and salt and pepper to taste.
2.For the meatballs: Pre-heat oven to 375°F. Combine all of the meatball ingredients in a mixing bowl, and season to taste with salt and pepper. Portion the mixture into 2 oz. balls. Bake for 20 minutes, or until just done.
3.For the pozole broth: heat large sauce pan over medium heat. Add the oil to the pan, sweat the onion, carrot, celery and garlic until just translucent, add the ground chili thyme and bay leaves. Cook for about 3 more minutes, then add the stock, tomato juice and lemon juice. Simmer for about 15 minutes, then whisk in the cornmeal. Simmer for another 5 minutes, season to taste with salt, pepper and hot sauce.
4.To plate: Remove the meatballs from oven and drain on paper towels. Place desired amount of grits in the bottom of a bowl. Place meatballs on top of grits, and ladle the broth over. Garnish with pickled cabbage.